The Australian dollar remains firmly above the US70c mark in today’s trading session after a strong round of data out of China alleviated fears on the health of the world’s 2nd largest economy.
China’s industrial out jumped from a 17-year low compared to the previous month. Consumer confidence is on the rise again after retail sales surged 9.8% in the month of June against analysts expectations for a figure of 8.3 percent.
China is Australia’s biggest trading partner so any good news is likely to have a positive affect on the Aussie dollar.
“China’s economy is finding a base and it was not as weak as feared, so risky currencies go up,” said Imre Speizer head of NZ strategy at Westpac Banking Corporation.
Ray Attrill, head of forex strategy at National Australia Bank in Sydney, said thesolid figures, which comes on the back of strong credit data on Friday, showed China’s stimulus program is beginning to filter into the system and move the Chinese economy along.
“There are signs it is starting to work, Whether you’re building a railway between two cities in China or whether you’re building stuff to sell to the U.S. it seems to need a lot of steel... it is still a good news story for Australia, that’s certainly the way that the market has chosen to interpret the numbers.” Mr Attrill said.